VD115: You don’t need to find that one exception
In this issue:
You don’t need to find that one exception
Stock in focus: Mayr-Melnhof Karton
The Rationality Test: Qualcomm
What I’ve been reading these past few weeks
News from our companies
Doubler Portfolio update
You don’t need to find that one exception
Have you noticed it’s SpaceX IPO week? You can’t look anywhere without seeing something about it. The marketing machine is firing on all cylinders, but there are plenty of critical voices out there too. Hopefully, people are actually listening to them.
So, I’m not really going to bore you with it, except to say that what’s being presented—and defended by some—is just plain crazy. The prospectus claims a total addressable market (TAM) of $28.5 trillion. The total revenue of all S&P 500 companies (the 500 largest listed companies in the United States) last year? Not even $20 trillion. The top 100? Just $10 trillion. Who exactly is SpaceX going to sell all of that to?
Credit where credit is due, especially after the last edition. While Nasdaq, Russell, and MSCI gave in to this IPO and relaxed their rules to accommodate these mega-companies, S&P stood its ground. That deserves some respect.
Bessembinder
Just like you can completely ignore SpaceX without worrying about missing out on one of those exceptional stocks, I also want to clear up how Hendrik Bessembinder’s study is being misrepresented in a lot of marketing pitches. They often claim that just 4% of stocks generate all the stock market’s gains. The takeaway? You’d better just buy an ETF to make sure you have that 4% in your portfolio. Or, you have to follow that one guru who supposedly has the gift of picking exactly that 4%.
Bessembinder’s study, “Do stocks outperform treasury bills?”, analyzed 25,000 US stocks and was later expanded to international markets. It showed that 58% of individual stocks underperformed short-term treasury bills over their entire lifespan.
In other words: 42% of stocks did outperform these short-term treasury bills over their lifetime. That’s a whole different story than 4%. However, in Bessembinder’s paper, that remaining 38% of well-performing companies is needed to fill the hole dug by the 58%.
So, step number one for a stock picker is simply to avoid that 58%. A quick tip: stay away from companies with high debt and razor-thin margins, and absolutely avoid structurally unprofitable companies. Simple, right?
Suddenly, your odds haven’t just gone from 4 out of 100 to 42 out of 100—by applying these basic criteria, we already have well over a 50% chance of beating treasury bills. If anyone feels compelled to figure out the exact percentage, let me know the result.
The study also assumes that all dividends paid out are reinvested back into the same company. In practice, I prefer to spend dividends on stocks where I see the most potential at that given moment, and that’s definitely not always the company paying out the dividend.
You Can Buy and Sell
Another crucial point is that the study looks at the entire lifespan of companies on the stock exchange. In other words, you would have to buy the company at its IPO and hold onto it until it either delists or until the present day.
When do companies leave the stock market? When they go bankrupt, get taken private, or get acquired. A company going bankrupt means a 100% loss. When a stock is delisted, it’s usually because someone thinks they can still squeeze some money out of it, or because the majority shareholder wants to get rid of the headaches that come with a public listing. These insiders rarely overpay. Just look at Belgium—how many examples do we know of companies going private on the cheap? From our own selection alone, we had SmartPhoto last year.
Besides, the idea of buying stocks at an IPO and just blindly holding onto them is absurd for investors. We can buy and sell along the way. Anyone who invests rationally will trade periodically. Just look at Warren Buffett, the ultimate champion of “buy and hold”—even he has bought and sold massive amounts of companies and shares.
The company I’ve made the most money on over the past five and a half years isn’t one I bought five years ago and still hold today. It’s X-Fab. I bought it at the end of 2020 for €2.98 and sold it in mid-2023 at €9.81. Every €10,000 turned into €32,919, or a 229% profit.
I reinvested those profits elsewhere, but starting in June 2024, I began buying X-Fab again in stages, from just under €6 down to €3.69 in April 2025. In October 2025, I sold the first batch at €7.17. This year, I sold more tranches above €8 before completely exiting just over €10. Even though there’s a big gap between the lowest and highest price, the staggered entry points brought my return to 59.4%. I also didn’t reinvest the full amount from the first sale, but only about two-thirds. If I add this up on a gross basis, I ultimately turned every €10,000 into €45,955—a 359.6% profit.
If I had bought X-Fab at that great entry point and just held it the entire time, I would have made a 200% profit at the time of writing (Wednesday, June 10, with the stock at €8.94). That’s quite a bit less than the 359.6% I actually locked in, and I’m not even counting the companies where I reinvested that remaining third of the initial profit.
And X-Fab’s overall performance from its IPO until now? Just 11.75%. X-Fab went public in April 2017 at €8. So, it’s one of those companies that falls squarely into Bessembinder’s 58% category.
Now, of course, the opposite can and will happen too. Especially with those unique, high-growth companies that keep performing for decades—that elusive 4%. For those, buying and selling along the way will often yield worse results.
Keep It Simple
But here’s the thing: I know I’m not capable of identifying that 4% today. As an entrepreneur, I’ve learned that even when you’re right in the thick of a business, you can make projections for the coming years, but you’ll never get them exactly right. It’s always either less or more.
Over time, I have learned not to sell top performers too quickly (thanks to Lotus Bakeries). Yet, despite more than 25 years of experience, I still misjudge the market from time to time, as was the case with Jensen.
The game I play is very simple. I look at every stock through a rational lens. At the current price, is the risk-to-reward ratio attractive enough to invest? No dogmas about strictly value, growth, quality, or any other label. Do I understand the company? Can I assess the risks? And can I make enough money from it to justify taking on those risks?
How long I hold a company depends entirely on how the business evolves, how the stock price moves, and what other opportunities are out there. If that means six months, so be it. If it means twenty years, that’s fine too. In reality, though, there are only two positions I’ve held for eighteen years—Ackermans & van Haaren and Sipef—and even those haven’t been uninterrupted or kept at the exact same position sizes. Over those same twenty years, I’ve bought and sold hundreds of companies, some of them more than once.
